Countering Brexit myths: TTIP and privatisation of the NHS

Many of us have expressed grave concerns about the Transatlantic Trade and Investment Partnership, better known as the TTIP. In 2013, European governments instructed the European Commission to negotiate a free-trade deal with the United States. Like all free-trade deals, TTIP brings potential benefits, but also considerable risks. However, in this case, the stakes are especially high given the difference between the market oriented health system in the United States and the system of national health systems in Europe based on universal coverage and solidarity. The situation has not been helped by the high level of secrecy that has surrounded many of the negotiations. The two parties justified this using the argument that neither side wished to reveal their negotiating position in advance. A particular concern was the proposal to use the Investor State Dispute Settlement (ISDS) mechanism to resolve any claims made under the agreement. This has involved a process that takes place in secret, involving negotiations rather than hearings on the facts, as would be the case in a court of law, using negotiators rather than legally qualified judges. Unsurprisingly, we were concerned that the TTIP could lead to an acceleration of the privatisation, under its many guises, that has been taking place in the NHS since the 2012 Health and Social Care Act.

Individuals and organisations across Europe have raised these concerns with the European Commission, both in meetings and in the media. The Commission has responded, and its negotiating position is now publicly available. It is clear that it has listened to these concerns and, while negotiating with the USA is never easy, it has taken them on board. As someone who has been highly critical of the TTIP negotiations in the past, I am now substantially reassured. In this blog, I hope that I will be able to reassure you too.

Of course, I’m not so naive as to believe that publicly funded health services, like the NHS, are safe. However, it is now clear that the threat to them arises from national governments, rather than the EU or international trade deals. Indeed, in some ways, European law offers some protections, just as it did in the various cases on cross-border care heard by the European Court of Justice, in which the court consistently upheld the importance of maintaining a sustainable national health system.

The EU approach to the TTIP negotiation contains four important safeguards, consistent with all previous trade agreements negotiated by the EU, and consistent with the clear statement in the European treaties that EU governments retain the freedom to manage public services and the way that they wish. If they choose to open up these services to the market, then they must play by the rules of the market. However there is no reason for them to do so. This is entirely a political choice.

First, there is no reason why EU governments should give up monopolies in the provision of health services. Second, in healthcare, as in social services and education, those services that receive public funding or other support of any form need not be opened up to competition from outside the EU. Third, governments remain free to provide subsidies to public health services, or indeed not to. If they do provide subsidies to domestic providers, there is no obligation to do the same with providers from outside the EU. Fourth, governments retain the freedom to regulate health services in the way that they choose. This can take many forms, for example by giving licenses to suppliers that require them to provide services equitably, such as the universal service obligation in relation to postal services, or by setting quality standards, such as accreditation mechanisms. They can do this at any level of government, whether national, regional or local.

In its negotiations on TTIP, the EU is negotiating for specific safeguards for public services. In its previous trade agreements, the means of doing so have varied. Some, such as the EU’s trade agreement with South Korea, involves a positive list, in which those services opened up to international competition are specified. Others involve a Negative list, such as the EU’s trade agreement with Canada, in which all services are opened up to competition but certain ones, such as health, can be excluded by adding them to an annex to the agreement. In practice, the difference is purely technical.

However, for many of us, the most important element of the Commission’s negotiating proposal is an entirely new form of ISDS. This is the issue that has caused most concern to those of us anxious about the TTIP. In this model, judgements would be given by publicly appointed, legally qualified judges. Investors could only bring a case in circumstances that would be precisely defined and limited such as discrimination on grounds of gender, race, religion, or nationality or denial of justice. The right of governments to regulate would be enshrined in the provisions of the TTIP. All proceedings will be transparent, with all documentation available on-line, while other parties with an interest in the dispute, such as advocacy groups working on human rights, will be able to intervene. This is very different to what has been in place with previous international trade agreements.

Few of us are in any doubt that there are significant threats to the NHS. Indeed, I have been one of the most vociferous in drawing attention to them. However, as is apparent since the passage of the 2012 Health and Social Care Act, which was entirely a piece of domestic legislation, not even extending to Scotland, Wales or Northern Ireland, the risk is one arising from domestic politics rather than any agreements being made in Brussels.

Postscript: on 18th March 2016, Martin Schulz, president of the European Parliament, speaking at the 2016 Brussels Forum, was absolutely clear. Unless the USA agreed to the protections being negotiated by the EU, the TTIP would never be agreed by the European Parliament. No ifs and no buts. Can those who support Brexit be sure that the UK parliament would be quite so robust?

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13 Comments

A very helpful commentary. However, I am not convinced by the EU “overview” paper, that the Commission understands the seriousness of the concerns. The major issue is relegated to two pages at the end (3.5). The new disputes procedure appears more transparent, but the last Commission position paper (September) I saw still provided for compensation from Governments for loss of future commercial profits – the Government has the right to regulate, but the possibility of a claim for compensation may make it unrealistic to try. I still think these provisions need strengthening. Your point that the biggest threat is the UK Government itself is, of course, quite right!

Martin, the new ISDS is still flawed because it preserves a different system of legal redress for multinational corporations. Why protect MNCs from the law which regulates everyone else? Transparency does not deal with this, nor the chilling effect of the colossal damages awards to MNCs likely as the price for preserving public policy. Has the EU really understood this?

ISDS works both ways. If you were a British company is working in the US would you be happy to rely on the US courts to arbitrate any dispute? These independent tribunals have been around for 50 years and they are essential to encouraging international trade.

Thanks, Stephen. I think you are right to distinguish between the Commission’s position paper, and the European Parliament’s position. But remember that the TTIP needs EP backing to be agreed (even if not technically legally – and this is disputed – definitely politically).